A
federal
grand
jury
in
the
District
of
Oregon
returned
an
indictment
today
charging
four
founders
of
Forsage,
a
purportedly
decentralized
finance
(DeFi)
cryptocurrency
investment
platform,
for
their
roles
in
a
global
Ponzi
and
pyramid
scheme
that
raised
approximately
$340
million
from
victim-investors.
According
to
court
documents,
Vladimir
Okhotnikov,
aka
Lado;
Olena
Oblamska,
aka
Lola
Ferrari;
Mikhail
Sergeev,
aka
Mike
Mooney,
aka
Gleb,
aka
Gleb
Million;
and
Sergey
Maslakov,
all
Russian
nationals,
allegedly
touted
Forsage
as
a
decentralized
matrix
project
based
on
network
marketing
and
“smart
contracts,”
which
are
self-executing
contracts
on
the
blockchain.
As
alleged
in
the
indictment,
the
defendants
aggressively
promoted
Forsage
to
the
public
through
social
media
as
a
legitimate
and
lucrative
business
opportunity,
but
in
reality,
the
defendants
operated
Forsage
as
a
Ponzi
and
pyramid
investment
scheme
that
took
in
approximately
$340
million
from
victim-investors
around
the
world.
“Together
with
our
partners,
the
department
is
committed
to
holding
accountable
fraudsters
who
cheat
investors,
including
in
the
emerging
DeFi
space,”
said
Assistant
Attorney
General
Kenneth
A.
Polite,
Jr.
of
the
Justice
Department’s
Criminal
Division.
“Today’s
indictment
showcases
the
department’s
ability
to
use
all
available
investigative
tools,
including
blockchain
analysis,
to
uncover
sophisticated
frauds
involving
cryptocurrency
and
digital
assets.”
According
to
court
documents,
the
defendants
allegedly
coded
and
deployed
smart
contracts
that
systematized
their
combined
Ponzi-pyramid
scheme
on
the
Ethereum
(ETH),
Binance
Smart
Chain,
and
Tron
blockchains.
Analysis
of
the
computer
code
underlying
Forsage’s
smart
contracts
allegedly
revealed
that,
consistent
with
a
Ponzi
scheme,
as
soon
as
an
investor
invested
in
Forsage
by
purchasing
a
“slot”
in
a
Forsage
smart
contract,
the
smart
contract
automatically
diverted
the
investor’s
funds
to
other
Forsage
investors,
such
that
earlier
investors
were
paid
with
funds
from
later
investors.
“Today’s
indictment
is
the
result
of
a
rigorous
investigation
that
spent
months
piecing
together
the
systematic
theft
of
hundreds
of
millions
of
dollars,”
said
U.S.
Attorney
Natalie
Wight
for
the
District
of
Oregon.
“Bringing
charges
against
foreign
actors
who
used
new
technology
to
commit
fraud
in
an
emerging
financial
market
is
a
complicated
endeavor
only
possible
with
the
full
and
complete
coordination
of
multiple
law
enforcement
agencies.
It
is
a
privilege
to
work
alongside
the
agents
involved
in
these
complex
cases.”
As
further
alleged
in
the
indictment,
the
defendants
falsely
promoted
Forsage
to
the
public
as
a
legitimate,
low-risk,
and
lucrative
investment
opportunity
through
Forsage’s
website
and
various
social-media
platforms.
However,
blockchain
analytics
confirmed
that
over
80%
of
Forsage
investors
received
fewer
ETH
back
than
they
had
invested
in
Forsage’s
Ethereum
program,
with
over
50%
of
investors
never
receiving
a
single
payout.
Additionally,
according
to
court
documents,
the
defendants
coded
at
least
one
of
Forsage’s
accounts
(known
as
the
“xGold”
smart
contract
on
the
Ethereum
blockchain)
in
a
way
that
fraudulently
siphoned
investors’
funds
out
of
the
Forsage
investment
network
and
into
cryptocurrency
accounts
under
the
founders’
control,
which
was
contrary
to
representations
made
to
Forsage
investors
that
“100%
of
the
[Forsage]
income
goes
directly
and
transparently
to
the
members
of
the
project
with
zero
risk.”
“While
advancements
in
the
virtual
asset
ecosystem
bring
new
opportunities
to
investors,
criminals
are
also
finding
new
ways
to
orchestrate
illicit
schemes,”
said
Assistant
Director
Luis
Quesada
of
the
FBI’s
Criminal
Investigative
Division.
“The
FBI
remains
committed
to
working
alongside
our
domestic
and
international
law
enforcement
partners
to
investigate
and
pursue
subjects
who
orchestrate
these
scams
and
attempt
to
defraud
investors.”
“Technology
is
always
changing
and
scams
and
swindles
evolve
alongside
it,”
said
Inspector
in
Charge
Eric
Shen
of
the
U.S.
Postal
Inspection
Service
(USPIS),
Criminal
Investigations
Group.
“The
U.S.
Postal
Inspection
Service
is
committed
to
investigating
those
who
engage
in
schemes
involving
cryptocurrency
investment
fraud,
which
can
cause
significant
financial
harm
to
unsuspecting
victims.
We
urge
individuals
to
be
cautious
when
considering
investments
and
to
always
do
their
due
diligence
before
providing
money
or
personal
information
to
any
individual
or
organization.”
“These
individuals
are
alleged
to
have
used
trendy
technology
and
opaque
language
to
swindle
investors
out
of
their
hard-earned
cash,”
said
Special
Agent
in
Charge
Ivan
J.
Arvelo
of
Homeland
Security
Investigations
(HSI)
New
York.
“But,
as
the
indictment
alleges,
all
they
were
doing
was
running
a
classic
Ponzi
scheme.
The
technology
may
change,
but
the
scams
remain
the
same
and
with
the
collaboration
amongst
all
our
partners,
we’re
able
to
see
through
the
phony
promises
and
bring
the
schemes
to
light.
HSI
is
committed
to
being
at
the
forefront
of
financial
investigations,
using
the
full
extent
of
our
investigative
capabilities
to
track
down
criminals
no
matter
what
new
tricks
they
use.”
Okhotnikov,
Oblamska,
Sergeev,
and
Maslakov
are
each
charged
with
conspiracy
to
commit
wire
fraud.
If
convicted,
the
defendants
face
a
maximum
penalty
of
20
years
in
prison.
The
FBI
Portland
Field
Office,
USPIS,
and
HSI
New
York’s
El
Dorado
Task
Force
are
investigating
the
case.
Trial
Attorneys
Sara
Hallmark
and
Tian
Huang
of
the
Criminal
Division’s
Fraud
Section
and
Assistant
U.S.
Attorneys
Quinn
Harrington
and
Meredith
Bateman
for
the
District
of
Oregon
are
prosecuting
the
case.
All
investor
victims
of
the
Forsage
scheme
are
encouraged
to
visit
the
webpage www.justice.gov/criminal-vns/case/united-states-v-vladimir-okhotnikov-et-al to
identify
themselves
as
potential
victims
and
obtain
more
information
on
their
rights
as
victims,
including
the
ability
to
submit
a
victim
impact
statement.
An
indictment
is
merely
an
allegation.
All
defendants
are
presumed
innocent
until
proven
guilty
beyond
a
reasonable
doubt
in
a
court
of
law.
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